Investing Flashcards

1
Q

_______ are interest- bearing, negotiable certificates of long-term debt. (________)

A

Bonds, loan

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2
Q

_______ are shares of ownership in a business corporation’s assets and earnings. (________)

A

Stocks, own

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3
Q

_______ pool the invested funds of many investors and use them to invest in a diversified portfolio. (includes _____________)

A

Mutual funds, stocks and/or bonds

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4
Q

______________
◦ Low risk, low reward

A

US Government Bonds

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5
Q

______________
◦ Some risk, some reward
◦ No federal taxes; and if purchased in same state you reside, no state tax

A

Municipal Bonds

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6
Q

______________
◦ Higher risk, higher reward
◦ Will pay tax

A

Corporate Bonds

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7
Q

___________ is the process of spreading your assets among several different types to lessen risk.

A

Asset allocation

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8
Q

___________ provides a measure of safety and reduces risk because a loss in one type may be offset by gains from others.

A

Diversification

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9
Q

___________ plans are retirement plans that are funded, at least in part, by an employer.

A

Employer pension

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10
Q

___________ plans are provided by a
local, state, or federal government.

A

Public pension

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11
Q

___________ plans are set up by individuals and are especially important to self-employed people and other workers who are not covered by employer pension plans

A

Personal retirement

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12
Q

___________ are contracts purchased from an insurance company that provide for a sum of money to be paid to a person at regular intervals for a certain number of
years or for life.

A

Annuities

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13
Q

Four major sources of retirement income:

A

Employer pension, public pension, personal retirement, annuities

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